But the plaintiffs’ attorneys have now successfully argued that the plaintiffs have at least two plausible claims for breach of ERISA duty and that the ruling by the 7th U.S. Circuit Court of Appeals in Chicago conflicts with ERISA opinions by other federal appeals courts. Biden’s solicitor general agreed.
Ultimately, when the Supreme Court reconvenes in October, it’s decision could answer the question of what qualifies as a plausible claim for relief in defined contribution plan excessive investment and recordkeeping fee lawsuits.
“The 401(k) and 403(b) industries and related players do not understand the potential impact of this case, especially with regard to any related litigation,” said Watkins. “This case could determine whether fiduciaries have burden of proof regarding causation of damages and prudence in similar cases.”
The forthcoming SCOTUS decision could trigger a slew of new litigation and appeals on cases that haven’t run out their statute of limitations, Watkins added.
The Supreme Court's decision to review the case was delayed because the justices had asked the Solicitor General's Office for comments. That is when Biden’s acting solicitor general Prelogar weighed in.
The Northwestern plan fiduciaries "offer no sound basis for denying review of the important and recurring questions raised by the petition” for review Prelogar wrote in a brief.
The Northwestern plan fiduciaries "failed to use any of several available methods to monitor and reduce the plans' cost of record-keeping services,” she argued.